Advertisements
Advertisements
Question
The rate of which commercial banks borrow from the Central Bank is the:
Options
Bank rate
Deposit rate
Lending rate
None of these
Advertisements
Solution
Bank rate
Explanation:
The bank rate is the rate at which commercial banks borrow from the central bank. It is defined as "the rate at which the central bank is ready to rediscount the first-class securities and bills presented before it by the commercial banks." Central banks employ the bank rate as a monetary policy tool to influence the economy.
RELATED QUESTIONS
Define qualitative credit control policy of the RBI.
Explain how credit rationing helps to control credit in an economy.
Which of the following is not a quantitative method of credit control?
The process of buying and selling of securities by the central bank of a country is known as ______.
Read the following statements - Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A): Bank rate is a quantitative instrument of monetary policy.
Reason (R): During inflation, RBI reduces the bank rate.
What is meant by open market operations?
Define the following term:
Margin Requirements.
Briefly explain the following credit control method adopted by the Central Bank.
Publicity
Explain the following function of the central bank of a country.
Fixation of margin requirement on secured loans.
Which are qualitative methods of credit control?
